King County’s future tourism prospects took a hit when the county council elected to divert some of the lodging tax funding which was planned for local tourism to instead go to affordable housing and SafeCo Field maintenance.
Now several county councilmembers and local tourism agencies are speaking out about the move taking from a vital – and already struggling – industry which was planning to use the extra revenue to better market the county to both national and international markets.
On Sept. 17, the King County Council voted 5-4 to approve a proposal sponsored by Councilmembers Joe McDermott and Claudia Balducci to redirect $135 million in lodging tax revenue to pay for the maintenance of Safeco Field as specified in the Seattle Mariners’ new lease terms. The decision also shifted $661 million to affordable housing, as well as other portions to cultural efforts.
However, the tourism sector’s portion was significantly reduced from $109.4 million over eight years in King County Executive Dow Constantine’s original proposal to just $8 million. That total also must be divided up between tourism-related organizations including Visit Seattle and Seattle Southside.
The dissenting councilmembers found fault with the redistribution of taxpayer funds to further the profits made by Mariners leadership.
Councilmembers Jeanne Kohl-Wells, Rod Dembowski and Larry Gossett voted against the plan and said in a joint statement that it would be “ironic” for the city of Seattle to “ratify a $700 million renovation deal for Key Arena paid primarily by private funding” and now have the King County Council “give away $135 million in public funds to a stadium occupied by a sole corporate tenant worth over $1 billion.”
The remaining “no” voter was Councilmember Dave Upthegrove who wrote: “The Mariners are a very profitable private business that can and should pay their own expenses… (now) the people lose $135 million that could have been spent on tourism promotion, housing, or other critical public services.”
Although the money had never been used for the tourism sector before, Visit Seattle President and CEO Tom Norwalk said local tourism agencies were counting on using the new revenue stream to further the reach of King County’s marketing efforts to better compete with other U.S. cities.
“I think any time that there is a tax revenue stream that potentially could become available to an industry that never had access to that stream is exciting and something we were looking forward to,” he told Lens.
The lodging tax came into the existence in the 1960’s and was commonly known as the “Kingdome tax,” as the funds went toward building the facility. Over the years the money was still collected and paid for a portion of Century Link Field. Ten years ago, the legislature decided that a portion of the tax would be available for tourism, housing, arts and culture in 2021.
Norwalk said the King County Council’s decision was disappointing because the tourism industry is the one that is generating the tax to begin with and is not getting money back to invest in its economic engine.
“I think that was a really disheartening thing to go through to see that it is not valued…having future dollars and keeping the industry robust and competitive is always one of our number one jobs,” said Norwalk, adding that the organization must now go back to the drawing board.
The reality that tourism will receive just $8 million out of $1.3 billion is tough to swallow, he added.
That amount of money may not be large enough to fund what the industry planned for 2021 and beyond. The Washington State Convention Center recently broke ground on its new “Summit” convention center which will open in 2022.
“It’s always been our understanding that some of the tax money would be available to us,” said Norwalk. “We were counting on that from a sales and convention acquisition standpoint between now and then, certainly.”
Visit Seattle also planned to use part of the funding to grow its international and overseas efforts to bring in more visitors, especially as the county prepares for the expanded International Arrivals Facility at Sea-Tac Airport.
There will not be any short-term effects of the relocation of tax funds, however Visit Seattle did plan on growing the number of visitor’s centers which now may not be as feasible with a shortage of funds.
There is the possibility of a grassroots effort coming forward to file a referendum to get signatures to put the issue up to a public vote, however Visit Seattle is not endorsing that action.
“It is pretty much done, and I think we are going to have to take King County Executive Dow Constantine on his word that he wants to figure out ways to be a part of this process and looking at how to develop more money for tourism marketing…I wish we would have had that conversation many years ago.”
He added that the choice not to reinvest in the vitality of the tourism industry was “short sighted,” especially taking into account that it is Seattle’s fourth largest industry at $7.4 billion.